When it comes to your money, you can never be too cautious. Unfortunately, there are many small steps we can take each day that turn us in the wrong direction financially. If you want to get ahead and stay there, you have to do more than just make money and pay your bills. A few new habits like those listed below can help pave the path for your financial future.
1. Get Life Insurance Early
There are many things that can wait until the last minute, but life insurance shouldn’t be one of them. The sooner you invest in life insurance, the better off you’ll be. Not only will you get a more favorable rate, but you will not have to worry that your family won’t be taken care of if you were to pass away suddenly. The amount of life insurance you need depends on your income, lifestyle, and the number of people that rely on your income. Most experts agree that five to ten times your annual income is a good start. If you contact me I can help you find a policy that works for your family and your budget.
2. Check Your Credit
Poor credit can hold you back in life by preventing you from qualifying for loans. Lexington Law estimates that someone with mildly damaged credit can expect to pay over $4,700 more for an automobile loan than those with a perfect credit score. When buying a home, a 30-year-loan will cost you over $130,000 more if you have bad credit compared to your neighbor with an 820 credit score. Poor credit can even keep you from getting a job.
Check your credit report at least once each year. TransUnion explains that three major credit reporting agencies are required to give you a copy of your report once each year. If you’re planning to make a major purchase and need to raise your score, avoid opening up new accounts, pay any outstanding balances you have, and do not allow yourself to fall behind on payments.
3. Stash Extra Cash in Savings
One of the easiest ways to watch your wealth increase is not to watch it at all. Any time you get a raise or receive an unexpected financial boost, direct that money into a high-yield savings account and leave it there.
4. Track Your Purchases
One of the most effective ways to get a better handle on your spending is to track it. Carry a notebook everywhere you go and write down what you spend. At the very least, make sure to keep track of non-essential purchases. You might just find that you are spending more than you thought.
5. Cut Things You Don’t Use
You are likely paying for many items and services that you don’t need. A prime example is cable television. Some providers will lure you in with heavily discounted promotions, which often feature premium channels at no charge for a few months. Your discounts may even last for a year. At the end of this promo period, fees and charges will start sneaking in.
Take the time to look at your bill; you may find that you are paying for subscriptions to premium channels you don’t use. HBO, Showtime, Starz, and Cinemax range from $12 – $15 per month. There are also sports channel fees, line insurance, and an assortment of other extras. If your bill is set up on auto-pay, you may not even realize it.
This is just a small list of ways you can regain control over your money, but it’s a good start. Remember, even seemingly insignificant changes can have a big impact in the long run, and making one positive change can and usually will lead to others.